Amazon is biggest threat, says Wesfarmers' Richard Goyder

Post mortem: Wesfarmers sees Amazon as a bigger threat than its local retail rivals.

The head of Wesfarmers says his main competitive threat comes from Amazon, the US-based retail website, rather than rival grocery Woolworths. He would like to keep his physical stores open ‘‘24/7’’ to compete properly with the internet, he says.

Speaking at the National Press Club on Tuesday, Mr Goyder said Wesfarmers – the owner of Australia’s second-largest supermarket chain, Coles – no longer thought its biggest competitor was Woolworths or Big W or ‘‘one of the other physical competitors’’.

Market definitions needed to be challenged by the regulator because they were being challenged by ‘‘all markets’’ at the moment, he said.

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‘‘I think Amazon is the biggest threat that we’ve got to our business model at the moment,’’ Mr Goyder said. ‘‘[Amazon is] a $150 billion company that finds its competitive advantage through cheap labour, low tax and highly innovative supply chains.

‘‘For efficient Australian businesses to have any chance of competing with these global giants, we must maintain a domestic regulatory environment that encourages vigorous competition and nurtures innovation.’’

Mr Goyder also said he would like to keep his physical stores open ‘‘24/7’’ because that would better suit the modern online retail reality.

‘‘The regulations we deal with in terms of what our physical presence can be and how we can operate in a physical environment are extraordinary in this day and age where our competitors can just go online,’’ he said.

‘‘In Western Australia you can buy Coles groceries online 24/7 but you can only go to our stores through definitive hours that are set through regulation.’’

His comments come just months away from the G20 Leaders Summit in Brisbane, which is taking place in November.

Global leaders will be using the summit to try to come up with ways to combat global profit shifting and tax base erosion.

Mr Goyder weighed into the debate over corporate profit shifting, saying Australia ought to lower its corporate tax rate to allow local companies to better compete with foreign jurisdictions.

‘‘Australia does need to think seriously about its corporate tax rate and reduce it because countries like Ireland and the UK have reduced their tax rate,’’ Mr Goyder said.

‘‘We paid something like $1.5 billion in tax last year. Year-in year-out, Wesfarmers pays somewhere like 29.5 per cent and 30.5 per cent of our pre-tax profits in tax. We’re a significant taxpayer in this country,’’ he said.

‘‘[But] some of our competitors from overseas – Aldi, Costco, those businesses – from what I can gather ... pay very small amounts of tax in this country.’’

Mr Goyder also said that if the federal government pushed ahead with its controversial paid parental leave scheme, he would consider boosting his support for his company’s in-house childcare services for Wesfarmers employees.

‘‘We would look at how we could subsidise childcare or become a subscriber to childcare facilities,’’ he said.